The conditions and limitations in the following table apply to royalty relief under Sec. 203.41. ------------------------------------------------------------------------
(a) Your lease has produced gas or oil your lease cannot earn an
from a well with a perforated interval RSV under Sec. 203.41 as
the top of which is 18,000 feet TVD SS or a result of drilling any
deeper, subsequent deep wells or
phase 1 ultra-deep wells.(b) You determine RSV under Sec. 203.41 that determination
for the first qualified deep well or establishes the total RSV
qualified phase 1 ultra-deep well on your available for that drilling
lease (whether an original well or a depth interval on your
sidetrack) because you drilled and lease (i.e., either 15,000-
produced it within the time intervals set 18,000 feet TVD SS, or
forth in the definitions for qualified 18,000 feet TVD SS and
wells, deeper), regardless of the
number of subsequent
qualified wells you drill
to that depth interval.(c) A qualified deep well or qualified the RSV earned by that well
phase 1 ultra-deep well on your lease is under Sec. 203.41 applies
within a unitized portion of your lease, only to production from
qualified wells on or
allocated to your lease and
not to other leases within
the unit.(d) Your qualified deep well or qualified the lease with the
phase 1 ultra-deep well is a directional perforated interval that
well (either an original well or a initially produces earns
sidetrack) drilled across a lease line, the RSV. However, if the
perforated interval crosses
a lease line, the lease
where the surface of the
well is located earns the
RSV.(e) You earn an RSV under Sec. 203.41, that RSV is in addition to
any RSS for your lease
under Sec. 203.45 that
results from a different
wellbore.(f) Your lease earns an RSV under Sec. the RSV is not forfeited or
203.41 and later produces from a well terminated, but you may not
that is not a qualified well, apply the RSV under Sec.
203.41 to production from
the non-qualified well.(g) You qualify for an RSV under you still owe minimum
paragraphs (b) or (c) of Sec. 203.41, royalties or rentals in
accordance with your lease
terms.(h) You transfer your lease, unused RSVs transfer to a
successor lessee and expire
with the lease.------------------------------------------------------------------------
Example to paragraph (b): If your first qualified deep well is a sidetrack with a perforated interval whose top is 16,000 feet TVD SS and earns an RSV of 12.5 BCF, and you later drill a qualified original deep well to 17,000 feet TVD SS, the RSV for your lease remains at 12.5 BCF and does not increase to 15 BCF. However, under paragraph (c) of Sec. 203.41, if you subsequently drill a qualified deep well to a depth of 18,000 feet or greater TVD SS, you may earn an additional RSV.